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CITY OF ABC, FLORIDA SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Colltillued) Co 11 ditio 11 · We noted that billings from the project management consultants did not identify a specific project that they were billing for. Consequently, these costs are not included as part of the City's cost of construction. . We noted that the billings from the project management consultants incorporate an overhead rate that varies based on whether the consultants are working out of the field office or the home office. Discussions with City personnel indicated that that some of the consultants maintain an office at the City which would cause the rate to be the field rate, rather than the higher home office rate. Effect The effect is that, without the proper review and authorization of billings submitted by project management consultants, the City is potentially being charged incorrect rates. Capital assets of the City will ultimately be misstated if all construction costs are not properly accounted for. Calise The cause of thc conditions is a lad of proper review and authorization, as well as billings that are not sufficiently detailed. R ecol1ll1le Ildati Oil We believe that procedures should be implemented to ensure that the correct overhead rate is charged to the City. Furthermore, billings from the consultants should specifically identify projects so that costs incurred can be properly included as part of construction costs. 04-/2 Successioll Plallning The heads of every operational group are eligible for retirement or will be in the near future. Although the mainframe will be superseded by Windows-based servcrs, thc mainframe and applications must be maintained for the length of the City's financial document rctention policy. Both of the knowledgeable mainframe operators are eligible for retirement. Management has not addressed succession planning. R ecol1ll1lendation Due to the City's lengthy hiring process, the retirement of one or more operational heads could have a negative impact on the operations of thc Information Technology Department. It is extremely important that successors within each group be designated and fully trained. If adequate personnel are unavailable, they must be hired. Statlls [TD is working with the Department of Employee Relations in order to develop a template for Succession Planning that will be used to address the immcdiate issued facing the IT Depal1ment. and which can also be used for all departments city-widc. -I ~-